25/11/2013

New standard gauge railway ‘is a do-or-die project for Kenya’

A railway station under construction in Imara Daima in Nairobi on November 22, 2013. Photo/SALATON NJAU

In Summary

Country risks seeing Tanzania take a leading position in regional shipping business should it complete building its ports and rail before Kenya.

The upgraded Tanzanian central line on a standard gauge is expected to ship 35 million tonnes of freight annually to landlocked Rwanda, Burundi, Uganda, and eastern DRC — countries that currently rely on Kenya’s infrastructure.

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Kenya’s status as the regional logistics hub could greatly be weakened should work on the standard gauge railway delay, says the government.

It is also feared that the Port of Mombasa could grind to a halt should Tanzania complete the $330 million harmonisation of its railroad network with those across Central and Southern Africa ahead of the East African standard gauge railway.

“This is Kenya’s chance to prove that it is an economic powerhouse by linking East and West Africa. If this fails, the economic loss may be huge,” said Transport and Infrastructure Cabinet secretary Michael Kamau.

He said this in his presentation to the parliamentary Transport Committee investigating the capacity of the China Bridges and Roads Company (CBRC) to build the Mombasa-Malaba standard gauge railway and why the contract was single-sourced.

Nyali MP Hazron Awitti had wanted the team to compel the government to cancel the tender and advertise it afresh for international bidding to protect the country’s image.

But Mr Kamau said failing to complete the project on time might kill the Port of Mombasa and that the Lamu Port Southern Sudan-Ethiopia Transport (LAPSSET) project would be useless.

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“The current 100 year-old railway sub-sector needs to be revamped to play its rightful role in the economy,” said Mr Kamau.

UPGRADED TANZANIAN CENTRAL LINE

The upgraded Tanzanian central line on a standard gauge is expected to ship 35 million tonnes of freight annually to landlocked Rwanda, Burundi, Uganda, and eastern DRC — countries that currently rely on Kenya’s infrastructure.

In comparison, the East African standard gauge railway, planned to be operational by 2018, is poised to haul 28 million tonnes of cargo annually between Kenya, Uganda, and Rwanda. Kenyas position as a gateway into East Africa has been under constant threat from Tanzania, which is currently constructing the region’s largest port at Bagamoyo at a cost of $11 billion.

By 2017, Tanzania is set to have four ports when Kenya will have only two — a situation that may significantly shift the flow of trade into the neighbouring country.

Bagamoyo will have the capacity to handle 20 million containers a year, in relation to Mombasa’s installed capacity of 800,000 and Dar es Salaam’s 500,000 containers per annum.

In August, Kenya commissioned a Sh5.8 billion berth expected to enhance Mombasa’s cargo handling capacity by 33 per cent from the current 600,000 containers.

It was the biggest upgrade to the Mombasa port since 1980, perhaps underlining the threat posed by Tanzania.

The country is also pushing for the completion of a second container terminal at Kilindini Harbour at a cost of Sh28 billion. The new facility will double the port’s handling capacity upon completion in 2016.

Additionally, Kenya is shifting from manual port clearance to electronic system in a bid to reduce the time taken to clear cargo and save traders from incurring losses.

SORRY STATE

The national single window platform has in the first phase integrated the Kenya Revenue Authority, the Kenya Bureau of Standards, the Kenya Plant Health Inspectorate Service, and the Kenya Ports Authority.

The system will later be enhanced to link it to banks to enable traders to complete every bit of the international trade transaction, including payment, online.

Entrepreneurs have, however, pointed out that the sorry state of Kenya’s railway system remains a great challenge in moving cargo from Mombasa to other parts of Kenya and across the border to Uganda and Rwanda.